"The strengths of the new company, a leader in News, Sports and Entertainment, present truly unique opportunities", Lachlan Murdoch said.
Lachlan Murdoch has served as executive chairman of 21st Century Fox since 2015. Fox Entertainment Group chairmen and CEOs Dana Walden and Gary Newman are in advanced negotiations for a one-year contract extension to steer the division until the sale is finalized, sources say.
John Nallen, the company's current chief financial officer, will take a bigger role at New Fox as chief operating officer.
Current Executive Chairman Lachlan Murdoch will be Chairman and CEO at New Fox, and Rupert Murdoch will serve as co-chairman.
As news of the Disney-Fox deal began to cement last December, there were reports that James could move to Disney in a senior role after the Disney acquisition.
Prior to the Disney bid Fox had made an approach to acquire the 59 per cent of Sky it did not already own, however that deal has been repeatedly held up by United Kingdom regulators over fears it would undermine media plurality.
In recent months, James has distanced himself from the politics espoused by his father and the company's flagship channel, Fox News. Fox is now trying to sell off $52 billion of TV and entertainment assets, and once the deal is finalized, the resulting company will be lead by Rupert Murdoch and his son.
"New Fox", as it has been called, will include the company's major TV channels: Fox News, Fox Business Network, Fox broadcasting and the sports cable networks FS1 and FS2, among others. That would undoubtedly delay, if not derail, the Disney sale process and the formation of New Fox.
Its brands will include Fox News, Fox Business and Fox Sports.
"The new Fox will begin as the only media company exclusively focused on the domestic market; focused on what Americans love best - sports, news and entertainment, built and delivered for a USA audience", said Rupert Murdoch. But that began to change after Lachlan rejoined the business almost a decade later.